Georgia has ruled that an out-of-state school book club is liable for Georgia sales and use tax on sales of books and educational materials made to in-state educators, parents and students via mail order and internet. The taxpayer did not have a physical presence in Georgia and was not registered to do business in Georgia. The taxpayer’s parent company and a subsidiary had a physical presence in Georgia and were registered to do business in Georgia. The taxpayer made sales via schoolteachers or parent educators, who would bring the taxpayer’s products to students’ attention, gather and place orders, distribute the purchased products and handle returns, complaints and refunds. Parents and students could make purchases online using a code provided by a teacher. The Georgia Tax Tribunal found that the taxpayer was a “dealer” because it solicited sales in Georgia by means of “representatives” (the schoolteachers and educators). Additionally, the taxpayer engaged in mail order sales and solicited a market in Georgia by targeting teachers, schools, and classrooms in-state via bonus point incentives and a teacher advisor program. The taxpayer was also considered a “dealer” since related members with a physical presence in Georgia sold the same or similar products under common trademarks, services marks, or trade names. The taxpayer contended that Georgia’s imposition of a use tax violates the Commerce Clause since the taxpayer does not have substantial nexus with Georgia. The Tax Tribunal dismissed this since the taxpayer had substantial nexus in Georgia through its sole reliance on teachers and parent educators to market and sell its products. This case also challenged the Georgia affiliate nexus provisions that were passed in 2012. (Scholastic Book Clubs, Inc. v. Riley, Georgia Tax Tribunal, Docket No. 1552367, February 14, 2017)